Senators seek to cut U.S.D.A. funds used to buy surplus sugar

by Ron Sterk
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WASHINGTON — In the escalating debate over U.S. sugar policy and the current sugar surplus, five U.S. senators on March 20 filed an amendment to the Senate budget bill to cut U.S. Department of Agriculture funding that may be used to purchase surplus sugar.

The amendment was submitted by Democrat Senator Jeanne Shaheen of New Hampshire and co-sponsored by Republican Senators John McCain of Arizona, Pat Toomey of Pennsylvania, Mark Kirk of Illinois and Kelly Ayotte of New Hampshire. Senators Shaheen, Toomey, Kirk and Ayotte are part of a larger bipartisan group that introduced the Sugar Reform Act on Feb. 14 seeking changes in the farm bill’s sugar program.

Senators Shaheen, McCain, Toomey and Kirk also last week sent a letter to the U.S.D.A. asking for details about the potential cost to the government of buying excess sugar under the 2008 farm bill’s feedstock flexibility program and about the potential default on government loans to processors. That letter and the amendment were related to a March 13 story in The Wall Street Journal that said the U.S.D.A. was considering buying 400,000 tons of excess sugar to prevent sugar processors from defaulting on government loans of $862 million due to low sugar prices.

Some in the trade have suggested other options open to the U.S.D.A. are more likely to be used to reduce the surplus, including limits on quota imports and a possible payment-in-kind program for domestic producers.

Bulk refined beet sugar prices quoted by Milling and Baking News and Food Business News currently are about 27c a lb f.o.b. Midwest, the lowest since 24c in February 2008.

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